What types of payroll taxes does Gusto payroll handle?

Gusto Payroll handles every major payroll tax for you — calculating it on each payroll, withholding the right amounts, filing the returns, and paying the tax agencies on your behalf in all 50 states. Instead of tracking dozens of federal, state, and local deadlines yourself, Gusto automates the entire payroll tax lifecycle so you stay compliant without the paperwork. Here is a full breakdown of the taxes Gusto manages.

Federal payroll taxes

• Federal income tax withholding — calculated from each employee's Form W-4 and remitted to the IRS.
• Social Security tax (FICA) — 6.2% withheld from the employee and matched 6.2% by the employer, up to the annual wage base.
• Medicare tax (FICA) — 1.45% withheld and matched by the employer, plus the 0.9% Additional Medicare Tax on high earners.
• Federal Unemployment Tax (FUTA) — paid entirely by the employer and reported on Form 940.

Gusto files your Form 941 (quarterly federal return) and Form 940 (annual FUTA return) automatically, and deposits withheld taxes on the correct IRS schedule.

State payroll taxes

• State income tax withholding where applicable — some states, like Texas and Florida, have no state income tax.
• State Unemployment Insurance (SUI/SUTA) — an employer-paid tax based on your assigned state rate and wage base.
• State Disability Insurance (SDI) and Paid Family & Medical Leave — in states that require them, such as California, New York, and New Jersey.

Gusto registers the right forms with each state agency, applies your specific SUI rate, and supports multi-state payroll if you have employees working in more than one state.

Local payroll taxes

Many cities, counties, and school districts levy their own payroll, occupational, or school-district taxes. Gusto identifies the local taxes that apply based on each employee's work and home address, then withholds and files them — so you do not have to research local rules on your own.

Year-end tax forms

• Form W-2 — prepared, filed with the SSA, and delivered to employees at year end.
• Form W-3 — the transmittal summary that accompanies your W-2s.
• Form 1099-NEC — generated and filed for contractors you pay through Gusto.

Employees and contractors can download their own forms from Gusto's self-service portal, which cuts down year-end requests to you.

What Gusto does automatically vs. what you do

Gusto handles: tax calculations on every payroll, scheduling and paying deposits to the IRS and state and local agencies, filing all quarterly and annual returns, new-hire reporting to the state, and generating year-end forms. You handle: keeping employee details and W-4s up to date and making sure your account is funded before each payroll — Gusto does the rest.

Accuracy and compliance

Gusto stays current with changing federal, state, and local tax rules and backs its filings with an accuracy guarantee: if an error on Gusto's side causes a tax penalty, Gusto helps resolve it and covers eligible penalties. You also get clear tax reports and a complete history of every filing for your records.

Want to see the numbers before you run payroll? Try the Gusto payroll calculator, review Gusto's pricing plans, or see how Gusto compares on our payroll comparison chart. New customers can also earn a $300 Visa card for running their first payroll with Gusto.